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Eicher Motors' Revenue Drops 66 Per Cent In Q1 FY'21; Registers Net Loss Of ₹ 55 Crore

Eicher Motors reported total revenue of Rs. 818 crore from operations, witnessing a drop of 66 per cent, as opposed to Rs. 2,382 crore in Q1 of FY 2020. The company reported a net loss of Rs. 55 crore during the previous quarter against a profit of Rs. 452 crore during the same period last fiscal.

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Volumes for Eicher's core businesses, Royal Enfield and VECV dropped significantly in Q1 FY'21

Highlights

  • Eicher Motors' earnings before EBITDA was Rs. 4 crore in the last quarter
  • Royal Enfield sold 58,383 motorcycles last quarter, a decline of 68% YoY
  • VECV's sales were down 84%, but did better than the industry's 91% drop

Eicher Motors announced its results for the quarter of April to June 2020 reporting a loss of 66 per cent in operating revenue. The company reported its total revenue from operations at ₹ 818 crore, as opposed to ₹ 2382 crore in Q1 of the 2019-20 financial year. The earnings before interest, tax, depreciation and amortisation (EBITDA) was ₹ 4 crore as compared to ₹ 614 crore in the same quarter of the previous financial year. The manufacturer reported a net loss of ₹ 55 crore during the previous quarter against a profit of ₹ 452 crore during the same period last fiscal.

Also Read: Royal Enfield Records 5.6% Sales Growth In July Over June 2020; YoY Sales Drop By 36 Per Cent

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Royal Enfield has shown signs of recovery in sales and the company started its 'Service on Wheels' initiative to better support its customers

Commenting on Eicher Motors' performance, Siddhartha Lal, MD - Eicher Motors said, "The previous quarter put forth unprecedented challenges for the industry and for Eicher Motors. However, we believe that the long term potential for both Royal Enfield and VECV is very promising. Towards the end of the quarter, we've witnessed encouraging consumer sentiment which was evident in our sales for the month of June. We believe that this trend will continue into this quarter as well. International business at Royal Enfield is doing extremely well, led by the modern 650 Twin motorcycles and the Himalayan. The Interceptor 650 has been the highest-selling motorcycle in the middleweight segment in the UK for the last one year. At VECV, we have always remained focused on our long term plans and have rolled out initiatives to improve efficiencies, productivity and further upgrade processes."

Also Read: Royal Enfield Launches Service On Wheels Initiative

Speaking on Royal Enfield's performance, Vinod K. Dasari, CEO, Royal Enfield said, "Through a challenging environment, we've remained focused on the opportunities for Royal Enfield.  We've worked on strengthening our relationship with our customers and have ensured full support to our network partners. From a consumer point of view, our effort has been to build seamless and hasslefree processes and focus on retail and service excellence. We have launched several initiatives that offer contactless purchase and service experience for the consumer, including the Service on Wheels initiative launched recently. From a business point of view, the initial consumer sentiment over the last two months has been very encouraging. Demand from semi-urban and rural towns have picked up well, and our network of studio stores across the country have been able to cater to this demand. There is pent up demand and we are optimistic about stronger recovery once supply chain stabilises."

Royal Enfield sold 58,383 motorcycles between April and June 2020, witnessing a decline of 68 per cent from 181,966 motorcycles sold over the same period in FY 2019-20. The bike maker resumed operations on May 6, 2020 after having temporarily closed its facilities from March 23 onwards due to the nationwide lockdown. Retail operations, on the other hand, resumed as the country unlocked operations in a phased manner. The company's 921 dealerships and 638 studio stores are now operational.

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VECV reported a decline of 84 per cent in sales in the last quarter with 2129 units sold

Also Read: Eicher Motors Introduces Connected Technology Across Entire Commercial Vehicle Range

For Eicher's commercial vehicle operations, Volvo Eicher Commercial Vehicles' (VECV) revenue from operations stood at ₹ 641 crore, down by 72 per cent from ₹ 2255 crore in the same period last fiscal. The EBITDA loss stood at ₹ 72 crore as against a profit of ₹ 137 crore last year in the corresponding quarter. The manufacturer reported a loss of ₹ 120 crore, against a profit of ₹ 38 crore last year. Furthermore, VECV's sales declined by 84 per cent with 2129 units sold last quarter, as against 13,331 units in Q1 of last year. Nevertheless, the company's decline in sales was lower than that of the industry, which saw a 91 per cent drop in volumes. The automaker has resumed operations as the market shows signs of recovery.

Speaking on the performance Vinod Aggarwal, MD and CEO, VECV said, "The last quarter has been challenging for the commercial vehicle industry with almost complete washout in the first two months of the quarter on account of the pandemic. Since the economic activity was impacted, movement of goods and services was also severely impacted. As a result, the industry has witnessed one of the worst quarters with an overall volume decline of 91 per cent. We expect the situation to gradually improve starting from the festive months led by infrastructure investments and strong pent up replacement demand."

Also Read: Volvo Eicher Commercial Vehicles To Acquire Volvo Buses India

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VECV announced the acquisition of Volvo Buses India, which will form a new bus division under the company

VECV had rolled out its BS6 line-up of commercial vehicles prior to the lockdown with the new Eutech6 technology, while it also introduced connected vehicle technology across its range last month to offer improved convenience and transparency in operations. The manufacturer more recently announced the acquisition of Volvo Buses India as part of VECV under the Eicher Group.

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